Tuesday, 18 June 2019

Boeing Forecasts $8.7 Trillion Aerospace and Defence Market through 2028

 A strong commercial aviation industry, stable defence spending and the need to service all platforms throughout their lifecycle are driving a growing aerospace and defence market, according to the Boeing Market Outlook. Released today at the Paris Air Show, the outlook values the aerospace and defence market at $8.7 trillion over the next decade, up from $8.1 trillion a year ago.


The Boeing Market Outlook (BMO) includes a $3.1 trillion projected demand for commercial aeroplanes through 2028 as operators replace older jets with more capable and fuel-efficient models, and expand their fleets to accommodate the steady rise in air travel across emerging and established markets.

The BMO also projects $2.5 trillion of defence and space opportunities during the next decade as governments modernize military platforms and systems, pursue new technologies and capabilities and accelerate exploration from sea to space. The projected spending – spanning military aircraft, autonomous systems, satellites, spacecraft and other products – continues to be global in nature with 40 percent of expenditures expected to originate outside of the United States.

Supporting the defence, space and commercial platforms with lifecycle solutions will fuel a services market valued at $3.1 trillion through 2028.

"Aerospace and defence continues to be a healthy and growing industry over the long term, boosted by strong fundamentals across the commercial, defence and services sectors and demand that is geographically-diverse and more balanced between replacement and growth than ever before," said Boeing Chief Financial Officer and Executive Vice President of Enterprise Performance & Strategy Greg Smith.

Boeing today also unveiled its 2019 Commercial Market Outlook (CMO), a longer-term forecast that delves deeper into the market for commercial aeroplanes and services. The newest CMO shows growing passenger volumes and increasing aeroplane retirements will drive the need for 44,040 new jets, valued at $6.8 trillion over the next two decades and up 3 percent from a year ago. The global commercial aeroplane fleet will also sustain the need for aviation services valued at $9.1 trillion, leading to a total commercial market opportunity of $16 trillion through 2038.
"Time and again, commercial aviation has shown itself to be extremely resilient. Notwithstanding some recent moderation in passenger and cargo traffic growth, all indications are pointing to our industry sustaining its unprecedented streak of profitable expansion. In fact, we see a market that is broader, deeper and more balanced than we have seen in the past," said Boeing Commercial Marketing Vice President Randy Tinseth. "The healthy market fundamentals will fuel a doubling of the commercial fleet over the next two decades and a massive ecosystem of lifecycle solutions to maintain and support it."

Of the new airplane deliveries, forecasters say 44 percent will go toward replacing aging aircraft while the rest will accommodate traffic growth. Together, the new jets support an industry where passenger traffic will grow an average 4.6 percent and cargo traffic will grow an average 4.2 percent. Factoring in the new aeroplanes and the jets that would remain in service, the global commercial fleet is expected to reach 50,660 aeroplanes by 2038. This is the first time the projected fleet has crested the 50,000 mark.

The biggest aeroplane segment remains single-aisles such as the 737 MAX, as operators are projected to demand 32,420 new aeroplanes. This $3.8 trillion market is driven in large part by the continued strength of low-cost carriers, healthy replacement demand and continuing growth in Asia Pacific.
In the widebody segment, Boeing forecasts demand for 8,340 new passenger aeroplanes valued at more than $2.6 trillion over the next twenty years. Widebody demand is spearheaded in part by a significant wave of older aeroplanes that will need to be replaced beginning in a few years. Bolstering the demand for larger aircraft, operators are expected to need 1,040 new large production freighters over the forecast period.
New Airplane Deliveries through 2038 by size

Airplane type
Seats
Total deliveries
Market value
Regional jets
90 and below
2,240
$105 billion
Single-aisle
90 and above
32,420
$3,775 billion
Widebody

8,340
$2,650 billion
Freighter widebody
---------
1,040
$300 billion
Total
---------
44,040
$6,800 billion
The global aeroplane fleet will continue to generate significant demand for aviation services, including supply chain support (parts and parts logistics), maintenance and engineering services, aircraft modifications and airline operations. Over the next 20 years, Boeing forecasts a $9.1 trillion market for commercial aviation services with annual growth of 4.2 percent.

"This is a very dynamic and exciting marketplace, one that is driven by new technology and a relentless drive for greater efficiency, reliability and safety," said Tinseth. "On the technology front, we see operators using drones to inspect aeroplanes, and manufacturers delving into data analytics for insights to improve aeroplane maintenance and performance. Above all, operators are looking to providers to offer solutions that help them serve their customers more efficiently and reliably.
Major categories in the services forecast include the $2.4 trillion market for maintenance and engineering, which covers tasks required to maintain or restore the airworthiness of an aircraft and its systems, components and structures. Another major category is the $1.1 trillion market for flight operations, which covers services associated with the flight deck, cabin services, crew training and management and aeroplane operations.
Commercial Aviation Services through 2038 by service category

Service category
Market value
Corporate & External
$155 billion
Marketing & Planning
$545 billion
Flight Operations
$1,175 billion
Maintenance & Engineering
$2,400 billion
Ground & Cargo Operations
$4,825 billion
The Asia Pacific region, which includes China, will continue to lead the way in future growth, accounting for 40 percent of total aeroplane deliveries and 38 percent of total services value. North America and Europe round out the top three regions for future growth.
Commercial market through 2038 by region



Region
Airplane deliveries
 Services market
Asia Pacific
17,390
$3,480 billion
North America
9,130
$1,980 billion
Europe
8,990
$1,865 billion
Middle East
3,130
$790 billion
Latin America
2,960
$500 billion
Russia/C.I.S.
1,280
$270 billion
Africa
1,160
$215 billion
Total
44,040
$9,100 billion
Around the world, the growing commercial fleet will require a larger supply of pilots, technicians and crews. Boeing's 2019 Pilot and Technician Outlook forecasts that the civil aviation industry will need nearly 2.5 million new aviation personnel between now and 2038.
The Commercial Market Outlook (CMO) is the longest-running jet forecast and is regarded as the most comprehensive analysis of the commercial aviation industry. The CMO and other Boeing market forecasts can be found at https://www.boeing.com/commercial/market/.
Forward-Looking Information Is Subject to Risk and Uncertainty
Certain statements in this release may be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "forecasts," "projects," "plans," "believes," "estimates" and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future plans, business prospects, financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on current assumptions about future events that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict.
Many factors could cause actual events to differ materially from these forward-looking statements, including economic conditions in the United States and globally, general industry conditions as they may impact us or our customers, and other important factors disclosed previously and from time to time in our filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update or revise any such statement, except as required by law.



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